Corneal fibrosis is often seen in patients with ocular trauma and infection that compromises corneal transparency resulting in vision loss. Treatment strategies including NSAIDs, steroids, MMC and corneal transplants have shown tremendous success but with several side effects and cellular toxicity. Histone deacetylase inhibitors (HDACi) have been shown to inhibit corneal fibrosis via TGFβ signaling pathway. In this study, we investigated safety, efficacy and mechanism of action of a HDACi, ITF2357 in TGFβ-stimulated in vitro primary human cornea stromal fibroblasts (pHCSFs) and in vivo in a photorefractive keratectomy-treated rabbit model of corneal fibrosis. We found that in vivo ITF2357 decreased collagen I, collagen IV, fibronectin, integrin αVβ3 expression with a reduction in corneal haze. In addition, ITF2357reduced myofibroblast formation, suppressed phosphorylation of Smad proteins in TGFβ pathway and inhibited key responsive protein, P4HA1 involved in pro-collagen synthesis. Treatment of pHCSFs with ITF2357 activated BMP7 levels and expressed all the members of inhibitor of differentiation proteins (Id1-Id4), however, it failed to rescue TGFβ-driven transdifferentiation of fibroblasts to myofibroblasts in the presence of siRNA specific to Id3. We conclude that ITF2357 is a potential anti-fibrotic drug that exerts its action via activation of Id3, a downstream target of TGFβ/BMP7 signaling pathways.